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terest in such trust which is transferred to the donee spouse. (2) Definitions

For purposes of paragraph (1), the term “noncharitable beneficiary” and “qualified charitable remainder trust” have the meanings given to such terms by section 2056(b)(8)(B).

(h) Denial of double deduction

Nothing in this section or any other provision of this chapter shall allow the value of any interest in property to be deducted under this chapter more than once with respect to the same donor. (Aug. 16, 1954, ch. 736, 68A Stat. 412; Dec. 31, 1970, Pub. L. 91-614, title I, § 102(c)(3), 84 Stat. 1841; Oct. 4, 1976, Pub. L. 94-455, title XIX, 8 1902(a)(12)(E), title XX. $ 2002(b). 90 Stat. 1806. 1854; Aug. 13, 1981, Pub. L. 97-34, title IV, $ 403(b)(1), (2), (d)(2), 95 Stat. 301, 303; Jan. 12, 1983. Pub. L. 97-448, title I. $ 104(a)(2)(B), (4)-(6), 96 Stat. 2380, 2381.)

ercisable by will or during life, is exercisable by such spouse alone and in all events. (f) Election with respect to life estate for donee

spouse (1) In general

In the case of qualified terminable interest property

(A) for purposes of subsection (a), such property shall be treated as transferred to the donee spouse, and

(B) for purposes of subsection (b)(1), no part of such property shall be considered as retained in the donor or transferred to any person other than the donee spouse. (2) Qualified terminable interest property

For purposes of this subsection, the term “qualified terminable interest property” means any property

(A) which is transferred by the donor spouse,

(B) in which the donee spouse has a quali. fying income interest for life, and

(C) to which an election under this subsection applies. (3) Certain rules made applicable

For purposes of this subsection, rules similar to the rules of clauses (ii), (iii), and (iv) of section 2056(b)(7)(B) shall apply. (4) Election (A) Time and manner

An election under this subsection with respect to any property shall be made on or before the first April 15th after the calendar year in which the interest was transferred and shall be made in such manner as the Secretary shall by regulations prescribe. (B) Election irrevocable

An election under this subsection, once made, shall be irrevocable. (5) Treatment of interest retained by donor spouse (A) In general

In the case of any qualified terminable interest property

(i) such property shall not be includible in the gross estate of the donor spouse, and

(ii) any subsequent transfer by the donor spouse of an interest in such property shall not be treated as a transfer for

purposes of this chapter. (B) Subparagraph (A) not to apply after transfer

by donee spouse Subparagraph (A) shall not apply with respect to any property after the donee spouse is treated as having transferred such property under section 2519, or such property is includible in the donee spouse's gross

estate under section 2044. (g) Special rule for charitable remainder trusts (1) In general

If, after the transfer, the donee spouse is the only noncharitable beneficiary (other than the donor) of a qualified remainder trust, subsection (b) shall not apply to the in

AMENDMENTS 1983–Subsec. (f)(3). Pub. L. 97-448, § 104(a)(6), substituted "rules similar to the rules of clauses (ii)" for "the rules of clauses (ii)".

Subsec. (f)(4). Pub. L. 97-448, § 104(a)(4), divided the existing provisions into subpars. (A) and (B), in subpar. (A) as so designated substituted "shall be made on or before the first April 15th after the calendar year in which the interest was transferred and shall be made in such manner as the Secretary shall by regulations prescribe" for "shall be made on the return of the tax imposed by section 2501 for the calendar year in which the interest was transferred", and in subpar. (B) as so designated substituted "An election under this subsection" for "Such an election".

Subsec. (f)(5). Pub. L. 97-448, § 104(a)(5), added par. (5).

Subsec. (h). Pub. L. 97-448, § 104(aX2)(B), added subsec. (h).

1981–Subsec. (a). Pub. L. 97-34, $ 403(b)(1), deleted (1) In general" designation for existing text and struck out par. (2), which declared that the aggregate of the allowed deductions for any calendar quarter should not exceed the sum of $100,000 reduced, but not below zero, by the aggregate of the allowed deductions for preceding calendar quarters beginning after Dec. 31, 1976, plus 50 percent of the lesser of the amount of the allowed deductions for such calendar quarter, determined without regard to par. (2), or the amount, if any, by which the aggregate determined under cl. (i) of par. (2) for the calendar quarter and for each preceding calendar quarter beginning after Dec. 31, 1976, exceeds $200,000.

Subsec. (f). Pub. L. 97-34, $ 403(b)(2), (d)(2), substituted provision relating to election with respect to life estate for donee spouse for provision relating to community property.

Subsec. (g). Pub. L. 97-34, $ 403(d)(2), added subsec. (g).

1976–Subsec. (a), Pub. L. 94-455 designated existing provisions as par. (1) and, as so designated, struck out one-half of" following "interest equal to" and added par. (2) relating to limitations on aggregate amount of deductions.

Subsec. (f)(1). Pub. L. 94-455, $ 1902(a)(12)(E), struck out “Territory” following “any State".

1 970–Subsec. (a), Pub. L. 91-614 substituted "quarter" for "year" in two places.

EFFECTIVE DATE OF 1983 AMENDMENT Amendment by Pub. L. 97-448 effective, except as otherwise provided, as if it had been included in the provision of the Economic Recovery Tax Act of 1981, Pub. L. 97-34, to which such amendment relates, see section 109 of Pub. L. 97-448, set out as a note under section 1 of this title.

EFFECTIVE DATE OF 1981 AMENDMENT Amendment by Pub. L. 97-34 applicable to gifts made after Dec. 31, 1981, see section 403(e)2) of Pub. L 97-34, set out as a note under section 2056 of this title.

EFFECTIVE DATE OF 1976 AMENDMENT Section 2002(d)(2) of Pub. L. 94-455 provided that: “The amendment made by subsection (b) (amending subsec. (a) of this section) shall apply to gifts made after December 31, 1976."

EFFECTIVE DATE OF 1970 AMENDMENT Amendment by Pub. L. 91-614 applicable with respect to gifts made after Dec. 31, 1970, see section 102(e) of Pub. L. 91-614, set out as a note under section 2501 of this title.

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 1015, 2012, 2044, 2519, 6019 of this title.

Stat. 2935; Pub. L. 97-34, title IV, $ 428, Aug. 13, 1981, 95 Stat. 319, provided that:

"(1) IN GENERAL.-Except as provided in paragraph (2), the amendments made by this section (enacting this chapter and sections 303(d), 691(2X3), and 2013(g) of this title) shall apply to any generation-skipping transfer (within the meaning of section 2611(a) of the Internal Revenue Code of 1954) made after June 11, 1976.

"(2) EXCEPTIONS.—The amendments made by this section shall not apply to any generation-skipping transfer

"(A) under a trust which was irrevocable on June 11, 1976, but only to the extent that the transfer is not made out of corpus added to the trust after June 11, 1976, or

"(B) in the case of a decedent dying before January 1, 1983, pursuant to a will (or revocable trust) which was in existence on June 11, 1976, and was not amended at any time after that date in any respect which will result in the creation of, or increasing the amount of, any generation-skipping transfer. For purposes of subparagraph (B), if the decedent on June 11, 1976, was under a mental disability to change the disposition of his property, the period set forth in such subparagraph shall not expire before the date which is 2 years after the date on which he first regains his competence to dispose of such property.

"(3) TRUST EQUIVALENTS.-For purposes of paragraph (2), in the case of a trust equivalent within the meaning of subsection (d) of section 2611 of the Internal Revenue Code of 1954, the provisions of such subsection (d) shall apply."

Amendment of section 2006(c) of Pub. L. 94-455, set out above, by section 702(n)(1) of Pub. L. 95-600, effective Oct. 4, 1976, see section 702(n)(5) of Pub. L. 95-600, set out as an Effective Date of 1978 Amendment note under section 2613 of this title.

$ 2524. Extent of deductions

The deductions provided in sections 2522 and 2523 shall be allowed only to the extent that the gifts therein specified are included in the amount of gifts against which such deductions are applied. (Aug. 16, 1954, ch. 736, 68A Stat. 414.)

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 303, 691, 2013, 2602, 2603, 2614, 2621 of this title.

CROSS REFERENCES Estate tax credit for gift tax, see section 2012 of this title.

8 2602. Amount of tax

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(a) General rule

The amount of the tax imposed by section 2601 with respect to any transfer shall be the excess of

(1) a tentative tax computed in accordance with the rate schedule set forth in section 2001(c) (as in effect on the date of transfer) on the sum of

(A) the fair market value of the property transferred determined as of the date of transfer (or in the case of an election under subsection (d), as of the applicable valuation date prescribed by section 2032),

(B) the aggregate fair market value (determined for purposes of this chapter) of all prior transfers of the deemed transferor to which this chapter applied,

(C) the amount of the adjusted taxable gifts (within the meaning of section 2001(b), as modified by section 2001(e)) made by the deemed transferor before this transfer, and

(D) if the deemed transferor has died at the same time as, or before, this transfer, the taxable estate of the deemed transferor, over

(2) a tentative tax (similarly computed) on the sum of the amounts determined under subparagraphs (B), (C), and (D) of paragraph (1).

8 2601. Tax imposed

A tax is hereby imposed on every generationskipping transfer in the amount determined under section 2602. (Added Pub. L. 94-455, title XX, $ 2006(a), Oct. 4, 1976, 90 Stat. 1879.)

EFFECTIVE DATE Section 2006(c) of Pub. L. 94-455, as amended by Pub. L. 95-600, title VII, $ 702(n)(1), Nov. 6, 1978, 92

Section numbers editorially supplied.

11-610 0-83_-4

(b) Multiple simultaneous transfers

If two or more transfers which are taxable under section 2601 and which have the same deemed transferor occur by reason of the same event, the tax imposed by section 2601 on each such transfer shall be the amount which bears the same ratio to

(1) the amount of the tax which would be imposed by section 2601 if the aggregate of such transfers were a single transfer, as

(2) the fair market value of the property transferred in such transfer bears to the ag. gregate fair market value of all property transferred in such transfers. (c) Deductions, credits, etc. (1) General rule

Except as otherwise provided in this subsection, no deduction, exclusion, exemption, or credit shall be allowed against the tax imposed by section 2601. (2) Charitable deductions allowed

The deduction under section 2055, 2106(a)(2), or 2522, whichever is appropriate, shall be allowed in determining the tax imposed by section 2601. (3) Unused portion of unified credit

If the generation-skipping transfer occurs at the same time as, or after, the death of the deemed transferor, then the portion of the credit under section 2010(a) (relating to unified credit) which exceeds the sum of

(A) the tax imposed by section 2001, and

(B) the taxes theretofore imposed by section 2601 with respect to this deemed trans

feror, shall be allowed as a credit against the tax imposed by section 2601. The amount of the credit allowed by the preceding sentence shall not exceed the amount of the tax imposed by section 2601. (4) Credit for tax on prior transfers

The credit under section 2013 (relating to credit for tax on prior transfers) shall be allowed against the tax imposed by section 2601. For purposes of the preceding sentence, section 2013 shall be applied as if so much of the property subject to tax under section 2601 as is not taken into account for purposes of determining the credit allowable by section 2013 with respect to the estate of the deemed transferor passed from the transferor (as defined in section 2013) to the deemed transfer

had been includible in the deemed transferor's gross estate and if the deemed transferor had died immediately before such transfer, or

(ii) in the case of a taxable distribution, by any expense incurred in connection with the determination, collection, or refund of the tax imposed by section 2601

on such transfer.
(B) Credit for state inheritance tax

If the generation-skipping transfer occurs at the same time as, or after, the death of the deemed transferor, there shall be allowed as a credit against the tax imposed by section 2601 an amount equal to that portion of the estate, inheritance, legacy, or succession tax actually paid to any State or the District of Columbia in respect of any property included in the generation-skipping transfer, but only to the extent of the lesser of

(i) that portion of such taxes which is levied on such transfer, or

(ii) the excess of the limitation applicable under section 2011(b) if the adjusted taxable estate of the decedent had been increased by the amount of the transfer and all prior generation-skipping transfers to which this subparagraph applied which had the same deemed transferor, over the sum of the amount allowable as a credit under section 2011 with respect to the estate of the decedent plus the aggregate amounts allowable under this subparagraph with respect to such prior gen

eration-skipping transfers. (d) Alternate valuation (1) In general In the case of

(A) 1 or more generation-skipping transfers from the same trust which have the same deemed transferor and which are taxable terminations occurring at the same time as the death of such deemed transferor (or at the same time as the death of a beneficiary of the trust assigned to a higher generation than such deemed transferor); or

(B) 1 or more generation-skipping transfers from the same trust with different deemed transferors

(i) which are taxable terminations OCcurring on the same day; and

(ii) which would, but for section 2613(b)(2), have occurred at the same time as the death of the individuals who are the deemed transferors with respect

to the transfers; the trustee may elect to value all of the property transferred in such transfers in accordance with section 2032. (2) Special rules

If the trustee makes an election under paragraph (1) with respect to any generation-skipping transfer, section 2032 shall be applied by taking into account (in lieu of the date of the decedent's death) the following date:

or.

(5) Coordination with estate tax (A) Certain expenses attributable to generation

skipping transfer If the generation-skipping transfer occurs at the same time as, or after, the death of the deemed transferor, for purposes of this section, the amount taken into account with respect to such transfer shall be reduced

(i) in the case of a taxable termination, by any item referred to in section 2053 or 2054 to the extent that a deduction would have been allowable under such section for such item if the amount of the trust

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 691, 2601 of this title.

8 2603. Liability for tax

(A) in the case of any generation-skipping transfer described in paragraph (1)(A), the date of the death of the deemed transferor (or beneficiary) described in such paragraph, or

(B) in the case of any generation-skipping transfer described in paragraph (1)(B), the

date on which such transfer occurred. (e) Transfers within 3 years of death of deemed trans

feror Under regulations prescribed by the Secretary, the principles of section 2035 shall apply with respect to transfers made during the 3year period ending on the date of the deemed transferor's death. In the case of any transfer to which this subsection applies, the amount of the tax imposed by this chapter shall be determined as if the transfer occurred after the death of the deemed transferor and appropriate adjustments shall be made with respect to the amount of any prior transfer which is taken into account under subparagraph (B) or (C) of subsection (a)(1). (Added Pub. L. 94-455, title XX, $ 2006(a), Oct. 4, 1976, 90 Stat. 1879, and amended Pub. L. 95-600. title VII. $702(h)(2), (n)(4), Nov. 6, 1978, 92 Stat. 2931, 2936; Pub. L. 97-34, title IV, § 403(a)(2)(B), Aug. 13, 1981, 95 Stat. 301.)

AMENDMENTS 1981–Subsec. (cX5). Pub. L. 97-34 redesignated subpars. (B) and (C) as (A) and (B), respectively, and struck out former subpar. (A), relating to adjustments to marital deduction and providing that if the genera. tion-skipping transfer occurs at the same time as, or within 9 months after, the death of the deemed transferor, for purposes of section 2056, relating to bequests, etc., to surviving spouse, the value of the gross estate of the deemed transferor shall be deemed to be increased by the amount of such transfer.

1978–Subsec. (a)(IXC). Pub. L. 95-600, $ 702(h)(2), inserted “, as modified by section 2001(e)" following "within the meaning of section 2001(b)".

Subsec. (d)IXA). Pub. L. 95-600, $ 702(n)(4)A), inserted “(or at the same time as the death of a beneficiary of the trust assigned to a higher generation than such deemed transferor)" following "such deemed transferor".

Subsec. (d)(2XA). Pub. L. 95-600, $ 702(n)(4)(B), inserted “(or beneficiary)" following "the deemed transferor".

(a) Personal liability (1) In general

If the tax imposed by section 2601 is not paid, when due then

(A) except to the extent provided in paragraph (2), the trustee shall be personally liable for any portion of such tax which is attributable to a taxable termination, and

(B) the distributee of the property shall be personally liable for such tax to the

extent provided in paragraph (3). (2) Limitation of personal liability of trustee who

relies on certain information furnished by the

Secretary
(A) Information with respect to rates

The trustee shall not be personally liable
for any increase in the tax imposed by sec-
tion 2601 which is attributable to the appli-
cation to the transfer of rates of tax which
exceeds the rates of tax furnished by the
Secretary to the trustee as being the rates
at which the transfer may reasonably be ex-
pected to be taxed.
(B) Amount of remaining exclusion

The trustee shall not be personally liable for any increase in the tax imposed by sec. tion 2601 which is attributable to the fact that

(i) the amount furnished by the Secre. tary to the trustee as being the amount of the exclusion for a transfer to a grandchild of the grantor of the trust which may reasonably be expected to remain with respect to the deemed transferor, is less than

(ii) the amount of such exclusion remaining with respect to such deemed

transferor. (3) Limitation on personal liability of distributee

The distributee of the property shall be personally liable for the tax imposed by section 2601 only to the extent of an amount equal to the fair market value (determined as of the time of the distribution) of the property received by the distributee in the distribu

tion. (b) Lien

The tax imposed by section 2601 on any transfer shall be a lien on the property transferred until the tax is paid in full or becomes unenforceable by reason of lapse of time. (Added Pub. L. 94-455, title XX, $ 2006(a), Oct. 4, 1976, 90 Stat. 1881.)

EFFECTIVE DATE OF 1981 AMENDMENT Amendment by Pub. L. 97-34 applicable to estates of decedents dying after Dec. 31, 1981, but inapplicable under certain conditions under will executed before date which is 30 days after Aug. 13, 1981, or under trust created by such date, see section 403(e) of Pub. L. 97-34, set out as a note under section 2056 of this title.

EFFECTIVE DATE OF 1978 AMENDMENT Amendment by section 702(h)(2) of Pub. L. 95-600 applicable to estates of decedents dying after Dec. 31. 1976, except that such amendment shall not apply to transfers made before Jan. 1, 1977, see section 702(hX3) of Pub. L. 95-600, set out as a note under section 2001 of this title.

Amendment by section 702(n)(4) of Pub. L. 95-600 effective as if included in this chapter as added by section 2006 of Pub. L. 94-455, see section 702(n)(5) of Pub. L. 95-600, set out as a note under section 2613 of this title.

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8 2611. Generation-skipping transfer

(a) Generation-skipping transfer defined

For purposes of this chapter, the terms "generation-skipping transfer” and “transfer" mean any taxable distribution or taxable termination with respect to a generation-skipping trust or trust equivalent. (b) Generation-skipping trust

For purposes of this chapter, the term "generation-skipping trust" means any trust having younger generation beneficiaries (within the meaning of section 2013(c)(1)) who are assigned to more than one generation. (c) Ascertainment of generation

For purposes of this chapter, the generation to which any person (other than the grantor) belongs shall be determined in accordance with the following rules:

(1) an individual who is a lineal descendent of a grandparent of the grantor shall be assigned to that generation which results from comparing the number of generations between the grandparent and such individual with the number of generations between the grandparent and the grantor,

(2) an individual who has been at any time married to a person described in paragraph (1) shall be assigned to the generation of the person so described and an individual who has been at any time married to the grantor shall be assigned to the grantor's generation,

(3) a relationship by the half blood shall be treated as a relationship by the whole blood,

(4) a relationship by legal adoption shall be treated as a relationship by blood,

(5) an individual who is not assigned to a generation by reason of the foregoing paragraphs shall be assigned to a generation on the basis of the date of such individual's birth, with,

(A) an individual born not more than 12% years after the date of the birth of the grantor assigned to the grantor's generation,

(B) an individual born more than 12 years but not more than 37% years after the date of the birth of the grantor assigned to the first generation younger than the grantor, and

(C) similar rules for a new generation every 25 years,

(6) an individual who, but for this paragraph, would be assigned to more than one generation shall be assigned to the youngest such generation, and

(7) if any beneficiary of the trust is an estate or a trust, partnership, corporation, or other entity (other than an organization de scribed in section 511(a)(2) and other than a charitable trust described in section 511(b)(2)), each individual having an indirect interest or power in the trust through such entity shall be treated as a beneficiary of the trust and shall be assigned to a generation under the foregoing provisions of this subsection.

(d) Generation-skipping trust equivalent (1) In general

For purposes of this chapter, the term generation-skipping trust equivalent” means any arrangement which, although not a trust, has substantially the same effect as a generation-skipping trust. (2) Examples of arrangements to which subsection

relates Arrangements to be taken into account for purposes of determining whether or not paragraph (1) applies include (but are not limited to) arrangements involving life estates and remainders, estates for years, insurance and annuities, and split interests. (3) References to trust include references to trust

equivalents Any reference in this chapter in respect of a generation-skipping trust shall include the appropriate reference in respect of a genera

tion-skipping trust equivalent. (Added Pub. L. 94-455, title XX, $ 2006(a), Oct. 4, 1976, 90 Stat. 1882.)

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 303, 691 of this title. 8 2612. Deemed transferor (a) General rule

For purposes of this chapter, the deemed transferor with respect to a transfer is

(1) except as provided in paragraph (2), the parent of the transferee of the property who is more closely related to the grantor of the trust than the other parent of such transferee (or if neither parent is related to such grantor, the parent having a closer affinity to the grantor), or

(2) if the parent described in paragraph (1) is not a younger generation beneficiary of the trust but 1 or more ancestors of the transferee is a younger generation beneficiary related by blood or adoption to the grantor of the

trust, the youngest of such ancestors. (b) Determination of relationship

For purposes of subsection (a), a parent related to the grantor of the trust by blood or adoption is more closely related than a parent related to such grantor by marriage. (Added Pub. L. 94-455, title XX, $ 2006(a), Oct. 4, 1976, 90 Stat. 1883.)

SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 303, 691, 2013 of this title.

8 2613. Other definitions (a) Taxable distribution

For purposes of this chapter(1) In general

The term "taxable distribution" means any distribution which is not out of the income of the trust (within the meaning of section 643(b)) from a generation-skipping trust to

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